Employee turnover is expensive and it’s a real business issue. A survey in 2016 by consulting firm, Deloitte, suggested that a combination of hiring costs and lost productivity added up to $121,000 per departing employee. Figures from the second quarter of 2018 showed that employee turnover in the American software sector was running at an annual rate of 24%, with two-thirds of those workers leaving voluntarily. And the issue is not slowing down. Turnover in the U.S. was little changed at 5.6 million and total separations rate was 3.7 percent in March of this year, according to Bureau of Labor Statistics. 

What can be done to reduce turnover?

In this day and age, finding talent with the right mix of skills and personality to fit the organization's culture, is not that easy. For consulting and professional services firms it is even more difficult, as their reputation comes in to play. In an article by Consultants 500, they list some of the largest causes or disruptors this industry is facing. For example, increased competition, deregulation, globalization, changing client demands, and technology and artificial intelligence.

“Competition to attract the type of talent your business needs is coming from all sectors—it’s no longer possible to simply talk of an FS [financial services] talent market as boundaries are now increasingly blurred, if not non-existent,” according to a report from PwC. With the U.S. unemployment rate at a record low, competition for top talent remains at an all-time high. In addition to the tight labor market, financial services are challenged by digital disruptions that require changes in the operating models, changing consumer needs and expectations, and regulatory shifts and security concerns. PwC states, “As financial institutions’ business models evolve, they’re really going to have to think differently, and that means hiring and developing people with vastly different skills and views.”

When your talent acquisition function is not run like a ‘well oiled machine’, you could be losing top talent and more than likely, leaving a pile of money on the table. In a study by Bersin, Deloitte Consulting LLP, “Bersin’s research indicates that companies with high-maturity talent acquisition functions exhibit 18% higher revenue and 30% greater profitability compared to companies with low-maturity talent acquisition performance.”

“By continuously fine-tuning the process, you’ll end up with faster, more efficient hiring. This means hiring the right people for your organization, higher revenues and a motivated, more productive workforce” states Elaine Davidson, Founder and CEO of Beacon Lane Consulting.

The current labor market is extremely competitive. The U.S. unemployment rate is at a 49-year low of 3.9 percent as of December 2018, and in September 2018 alone, there were 7.0 million openings and 5.7 million hires, according to the U.S. Bureau of Labor Stats. Talent Acquisition professionals and hiring managers for organizations should look at their recruiting strategy the same as traditional business does for consumers, supply and demand and price equilibrium.

It is a known fact that diversity recruiting has been a high priority amongst most talent acquisition professionals and organizations. Many people will agree that diversity is good for business. Not only bringing fresh ideas, but various perspectives as well.

When your internal hiring process is broken and the engagement survey shows less than satisfactory results, you might want to consider bringing in a recruitment process outsourcing company (RPO).

Talent acquisition is a topic all organizations are familiar with at some level. Choosing the right recruiting model that aligns with an organization’s strategic objectives is a more difficult task. “Developing effective recruiting strategies will need to become an ongoing process — one that doesn’t begin just when a new position opens up,” according to HR Professionals Magazine.